The Great Crypto Scam.
what you're looking at depending on who you ask is either a revolution for the internet and countless Industries as we know it like in all seriousness I compare it to the internet or the greatest Ponzi scheme in human history that whole thing is a promise that you can get rich for free accused of being all of these things is the world of cryptocurrencies or the other labels associated with it nfts blockchains web 3.0 from the bizarre onslaught of celebrity promotions and endorsements I got an ape Too part of the same Community we're both apes to the eye watering numbers and headlines digital artist people the final bid 69 million dollars oh my God to the grandiose claims about its potential it's the biggest technology that has ever happened in the I once described the world of cryptocurrencies as a story and I did that in hopeful optimistic tones and now now I don't think is the story that I initially thought it was they only make money because some other sucker lost more have fun staying poor it amazes me that anybody is buying into this they are decentralized ponji's teams the only thing that you have to show is Ponzi schemes it's all [ __ ] oh for me and many others it began here what you're looking at is a piece of artwork by a digital artist called Michael Joseph winkelmann otherwise known as people on February the 25th of 2021 this artwork was put on auction bidding started at a hundred dollars it eventually sold for 69.3 million dollars making it one of the biggest sales in digital art history that's what I do feel Super Lucky what happened afterwards foreign [Music] Halls that it doesn't exist in physical form it is only available digitally it's the first nft ever sold at auction non-fungible token nft nfts are non-fungible token explain nfts to people that don't know what you're talking about because I don't know what you're talking about it was like suddenly the term nft was just everywhere Jack Dorsey co-founder of Twitter sells a picture of his first ever tweet as an nft Jack Dorsey auctioning his first tweet as digital art 2.9 Million Dollars even popular internet memes were selling as this nft thing Nyan Cat 590 000 Charlie bit my finger 760 999 dollars disaster girl five hundred thousand dollars Doge 4 million dollars overly attached girlfriend 411 000 Bad Luck Brian 36 000 Scumbag Steve 57 000 you had singer songwriter Grime say killing six million dollars worth of digital art as nfts people were changing their profile pictures on social media to nfts that they had purchased it was like flexing an expensive car or a watch and then suddenly all these big celebrities and artists and influences were also replacing their profile pictures with nfts and announcing their own purchases of nfts and the Apes the Apes were were part of this bigger project of nfts called board ape Yacht Club I mean you had Snoop Dogg Eminem DJ Khaled little baby post Malone Stephen Curry Gwyneth Paltrow to name a few all of them purchasing these pictures of apes for sometimes hundreds of thousands of dollars and amongst this sea of high ticket sales you would hear that this is all part of something revolutionary it's the biggest technology that has ever happened in the history of life outside of things like fire regardless of how much you knew about nfts there was one message that was really clear behind every story every headline there was an underlying premise something is happening and there is a lot of money to be made [Applause] I asked you to explain nfts so popular talk show host Jimmy Fallon does this segment on his show with Paris Hilton where they show off their pictures of Boris uh here's my this is my yours is so cool I love the red heart sunglasses I love the captain hat it reminded me of me a little bit dude look at this they look like they could be friends they're buddies [Applause] uh this was the point in which I started to wonder okay what is actually happening and I think a lot of people started to as well you start to realize that the purchase of people's artwork that wasn't done through 69.3 million dollars in cash that purchase was made
using cryptocurrencies in fact all the nft purchases that we were seeing they were done through cryptocurrency the mysterious individual who purchased people's artwork that went by the pseudonym metakova turns out it's this guy called Vignesh sundarison who is already a cryptocurrency entrepreneur and had a working relationship with people months prior to the big sale and whilst there was all this talk about the Revolutionary potential behind what we're seeing there was another side of the story that was being painted by people who are far more skeptical and those voices had a clear warning what you are witnessing is a Mania we've got this system that is gleefully and gloriously corrupt a Mania that is being driven by greed get rich quick by investing in crypto currency Mass delusion my Abe is an inner reflection of myself or as other critics put it it is a giant and scan that has some of the largest names Brands Venture Capital firms backing it knowingly or not nfts were just a component of a much bigger machine with a lot of moving pieces and when you put those pieces together it creates a machine for one of the greatest scams in human history and it all begins here with a mysterious invention and a failed Revolution 2008 that's where this really begins Apple shares were just getting hammered this morning we're down by between three and four and a half percent generally the United States is going through a recession it hasn't seen since the Great Depression the consumers strangled they're watching their housing prices go lower they're watching their 401ks get diminished you created the mess we're in and now you're saying sorry amongst the backdrop of this all a mysterious individual is working on their own invention on the 31st of October they send an email to a cryptography mailing list the email begins I've been working on a new electronic cash system that's fully peer-to-peer with no trusted third party it was signed by somebody under the pseudonym Satoshi Nakamoto whoever this Nakamoto person was they had a vision the vision was to create a type of currency that existed digitally that could be controlled by no government or single individual that could be used to transacting globally no matter where you were or what time it was the name of this currency and invention Bitcoin on January the 3rd 2009 Nakamoto launches his invention creating the first ever Bitcoins to exist it was an attractive pitch you know especially to people who held anti-state control sentiments you know we're talking about anarchists techno anarchists Libertarians cypherpunks these were individuals who likely saw the government the banks the entire financial institution as just untrustworthy that they they can't be allowed to control monetary policy and it was these factions that became the first adopters of Bitcoin influencing its early culture the goal was simple preach the message of Bitcoin to others and increase its adoption Bitcoin was kind of like a religion of its own right like Satoshi Nakamoto was this jesus-like figure that would communicate with his disciples on online forums he would talk of this Future Vision of the world you know one where the dollar no longer existed and all transactions would be made through Bitcoin the global currency of the people that was owned by no Central entity to those early a adopters of Bitcoin they really felt like they were on the cusp of something revolutionary it just so happened that the more people started buying into the message the higher Bitcoins value Rose and the more people were willing to like put real dollars into buying Bitcoins Bitcoin is now up to 111 Bitcoin started drawing attention from places it probably wasn't expecting or even wanting the guys in suits you know the the big money the people who saw Bitcoin as revolutionary but perhaps more importantly as an opportunity the Winklevoss Twins were a perfect example of that I mean here you have two twins who have graduated from Harvard they've won a settlement for 65 million dollars against Mark Zuckerberg for stealing their initial idea of Facebook they found out about Bitcoin on a holiday trip to Ibiza and they started buying as much as they could they were stockpiling the currency it was by around 2013 that they were rumored to own about one percent of all Bitcoin in circulation that I think was a perfect early warning of what was to come foreign Bitcoin was doomed from the start that's what a lot of crypto Skeptics will tell you and I understand why relying on computer code and the ideals of tech anarchists probably isn't the best place to entrust a reimagining of the financial system Bitcoin had a fixed supply of 21 million coins which makes it deflationary by Nature so if one Bitcoin is worth more tomorrow than it is today why would you want to use it to transact with it's a pretty bad incentive to have if you're trying to make a Global Currency but that is already assuming that Bitcoin had the technical capabilities to become this worldwide currency which it didn't I mean Bitcoin had scaling issues thanks to design decisions that Nakamoto themselves had made it could only process seven transactions per second I mean compared to other traditional payment networks like Visa which can process 1700 transactions per second or Mastercard which handles 5 000 transactions per second and keeping the Bitcoin Network running wasted a lot of energy Bitcoin aimed to be decentralized meaning no government or single entity had control over it but in order to do that Nakamoto employed what is called a proof of work consensus model all this meant was that computers on the Bitcoin Network would be forced to use real world energy in order to solve algorithmic problems and whichever computer solved the problem first would be rewarded with more Bitcoins it was a process called Mining and that process is insane mainly wasteful of energy and what ends up happening proof of work incentivized this arms race between computers on the Bitcoin Network all of them looking to build more and more powerful computers to have a better chance of mining Bitcoin and the more powerful those computers grew the more real-world energy they ended up taking despite the fact that the transactions per second remain the same most Bitcoin mining done today is done by huge mining farms in warehouses Bitcoin for the most part failed in its objective of trying to become a Global Currency outside of illegal use purposes Bitcoin just wasn't being used to transact with so the obvious question becomes how how is it that despite its failings Bitcoin still survived and is very much present to this day but that's just the thing the Bitcoin that we see today is a shell of its former identity where most of the purchasing of Bitcoin today happens on centralized exchanges that have to comply with the laws of centralized institutions in the instances where you've heard about Bitcoin or if you've ever been encouraged to buy Bitcoin under what context is that always framed by 2014 the mysterious Satoshi Nakamoto effectively vanished from the internet and hasn't been heard from since what was left of his invention was no longer a currency it was something entirely different Bernie Madoff this was a guy who was well respected on Wall Street he ran a brokerage firm with a wealth management Branch he had many clients investing with his firm under the promise of great Returns on their money until the FBI arrested him this morning after he told senior employees yesterday that his business was a giant Ponzi scheme Madoff had been running the largest Ponzi scheme in history for the last 17 years and potentially longer worth around 64.8 billion dollars he would essentially put his investors money inside a bank account and then simply pay out early investors with the money that new investors were giving now Madoff eventually pleaded guilty and he was in prison up until his death in 2021. that is the essence of Eddie Ponzi scheme people invest into the scheme under this promise that they're going to make a great amount of returns and then early investors are paid using the money of new investors and this process is repeated on and on until eventually you run out of new recruits to keep investing money in scheme or eventually people start trying to cash out and it just collapses which tends to leave early investors with profits and the large majority of others with nothing but losses people hearing about Bitcoin would hear about two things one that it was revolutionary and two that it was valuable that if you buy now you could be rich later if you really really want to become wealthy in the future I would suggest you take one freaking dollar buy some Bitcoin Bitcoin to me it's not just an investment it's not just a maybe a get rich quick scheme as a lot of people put it but I see it as the future of currency I see it as the future of the financial system so you realize that most of the people buying Bitcoin they're not buying it to use as a currency they're buying it as an investment and therein lies the contradiction because the more people who used Bitcoin like an investment the less liable Bitcoin became as a currency the very thing it's being pitched as being revolutionary as so you know what you end up with right Bitcoin is a get rich quick scheme the promise is you can get rich for free magical internet money anyone who buys into the idea of Bitcoin is doing so to sell it for a higher price at a future date and the people that buy it of those people are also looking to sell it for a higher price at a future day the only way to make money from your Bitcoin investment is using the money of new investors you hear about people making money in Bitcoin they only make money because some other sucker lost more and unlike Bernie Madoff right who gets all the blame and dissatisfying jail time at the end of his story here you have an entity that isn't owned by anyone or some would argue isn't a decentralized currency a decentralized Ponzi scheme now Ponzi schemes are kept Alive by continuously finding new recruits and new markets to tap into so that money is continuously being poured into the scheme and so you start to see this similar incentive develop in the crypto space this desperate need to find a use case for this stuff and that use case has to be revolutionary enough to justify its Rising value Bitcoin may have been the first part of this machine the things we're about to get a whole lot more interesting Bitcoin had something going for it the blockchain system that kept it running was somewhat unique okay so let's not complicate things right you can think of Bitcoin like a digital spreadsheet that records transactions being used in the currency it's not a physical coin it's just data on a database after a certain number of transactions are made a brand new spreadsheet is created that links to the previous one and on and on and on it goes instead of using real names users are recognized through what are called wallet addresses which appear as a random string of numbers and letters and all of this is kind of kept together using computer code cryptography and the network of miners that are running it which is where the word cryptocurrency comes from so what was essentially just an immutable append-only database was touted as revolutionary you know blockchain was no longer just blockchain it was blockchain technology and it wasn't long before people started to see the success and the ideals that Bitcoin was based off and begin creating their own cryptocurrencies using this blockchain system [Music] vitalik buterin a teenager who decided to quit his favorite video game World of Warcraft after his warlock character had a damage component removed by the game developers vitalik says that he cried himself to sleep that night that was the day that he realized the horrors the centralized Services bring it sounds a bit ridiculous but vitalik would end up discovering Bitcoin in 2011 and he would start writing for a Bitcoin magazine it all appealed to his ideals in 2015 vitalik and several other co-founders launched the creation of their own blockchain based invention it was called ethereum much like Bitcoin ethereum had its own blockchain and it had its own native currency which was called ether there was one important difference though you see ethereum allowed its users to actually program applications on its blockchain put it this way if Bitcoin was like a spreadsheet then ethereum was like an Excel spreadsheet that allowed users to create functions to perform various different tasks because it was you know a little more advanced it was a glimpse of Hope at finding the Revolutionary use cases in the cryptocurrency world needed in order to justify the growing value that was being pumped into the system so what was the first thing that people started using ethereum for creating more cryptocurrencies and today we will be creating our own cryptocurrency in under 10 or maybe even under 5 minutes rather than needing to create your own blockchain and network you could just use ethereum's blockchain to create your own cryptocurrencies or crypto assets as people called them these assets that existed without their own native blockchain were called tokens there are now over 1500 cryptocurrencies it became known as the Ico Mania it was supposed to be this new way to fund your business businesses could create their own token coins release what is called a white paper which explains what the project aimed to do and then they could sell those tokens to the public otherwise known as an initial coin offering I see a whole wave of these token coins were being released some of them parodies and others were just blatant scams Bitcoin the Whopper coin Trump coin Kodak coin insane coin but here it is so I created dictator coin Jesus coin was a token coin that was promising to decentralize Jesus on the blockchain on its white paper its creators stated they were in early talks with churches to provide Miracles exclusively to Jesus coin owners Ponzi coin was very much open about the fact that it was a scam their website literally said it right there is as much as a scam as 99 of the icos out there but it's more transparent about it Ponzi coin still managed to raise 250 000 it didn't matter if the idea was good enough or not or if it even solved the problems it was claiming to solve all the mattered was that people believed in the token enough so that the value would rise and it would pay off the early investors who got in at the start there was one that you invested in that saw like two thousand percent growth last month yeah that was damn recording icos also marked the beginning of an unlikely friendship between those in the cryptocurrency space and influencers and celebrities if token coins were fueled by hype and detention then celebrities and influences were the ones that were running the gas stations famous professional boxer Floyd Mayweather along with producer DJ Khaled were paid one hundred thousand dollars and fifty thousand dollars respectively to promote the token coin Centro Tech in 2017. centratec was a project that was promising to deliver Financial Services to the cryptocurrency world the queen had raised 32 million dollars turns out they lied about their CEO who wasn't even a real person that existed they lied about business deals with MasterCard and visa and its co-founder Sam Sharma was eventually sentenced to eight years in prison icos effectively became a casino to gamble unregistered Securities but you have to remember the hidden incentives no matter how fraudulent or bizarre everything looks on the outside in the crypto world you have to keep clushing a potential use cases or or anything that will justify its value constantly rising to new investors and whilst the Ico Mania of 2017 was continuing a whole new idea was coming to fruition so how many of y'all have heard of this new game that came out recently I don't know how you how how do we actually describe what these things are and today we're talking about crypto kitties crypto kitties was probably one of the first nft projects to make it into the spotlight crypto kitties crypto kitties the viral blockchain based game that sparked a global craze or virtual cast it's a picture of a cat you logged onto the site you created an account that was connected to your crypto wallet and you'd play this game in which you would collect breed and sell virtual cats for cryptocurrency the key pitch here though is that every cat is its own unique token that exists on the ethereum blockchain making them what you would essentially call non-fungible or as they're often called now a non-fungible token an nft think of it like a digital Beanie Babies now if that sounds a little weird it's because it is crypto Keys became like its own Mania it generated three million dollars within its first week of launch and accounted for roughly 10 to 13 of all traffic on ethereum's network and where was everyone's Focus during that Mania okay that's two thousand seven hundred dollars for this little guy why use these cryptokitties 450 000 for this ugly mug the same reason you started out with the cryptocurrency to make guys this is a potential way to make some money this insane most users are trying to breed their cats at the moment not just because it's kind of cold but also because they can be very expensive there are thousands of people playing on the crypto kitties website once everyone started rushing to join in on the hike the economics of the game began to falter as the supply of crypto kitties stretched far beyond the demand eventually leading to a crash in the price of crypto kitties and a full in average users because as you continue to see time and time again almost everyone was there to make money but what remained of that Saga was the idea of non-fungible assets a brand new package a brand new pitch a new route to find use cases for cryptocurrencies and blockchain Technology this stuff was initially pitched to digital artist the idea was that you would make artwork then tokenize that artwork which just means turning it into a token that exists on a blockchain like ethereum if you wanted to know who owned the artwork all you had to do was just go and check the blockchain records and see which wallet was associated with the artwork in theory you could digitally verify the ownership of your art sounds exciting you might think I did too digital artist Michael winkelmann otherwise known as people began in challenge in 2007 where he would create one piece of artwork every single day and continue to do so throughout the years it was known as his everydays collection but to me the bigger project is this long-term everydays project which is a project that I've been working on you know every single day for over 12 years it was reportedly around October of 2020 when people was put in touch with an anonymous nft artist called pack and pack informed people about the world of nfts only a few months later he would end up auctioning a piece of artwork that contained a collage of the first 5000 images of the everyday series titled everydays the first 5 000 days 69.3 million dollars was how much it sold for in The Ether cryptocurrency one of the largest sales in digital art history the very sale that sent the search term nft skyrocketing so now the question becomes who decided to make that purchase so you purchased a collection of 5 000 pieces of digital art that anyone can easily see online for 69 million dollars why did you do that [Music] well as they were later revealed to be Vignesh sundarison a crypto entrepreneur who had recently co-founded a crypto investment firm with his business partner called metapurse only a few months before this big 69 million dollar purchase metakovan and his business partner had already bought another collection of nfts from people for over 2.2 million dollars they actually wrote a blog post about their purchase alluding to the fact that this was only part of a much bigger project that they had in mind that will quote flip the art World status quo on its head and what was that project that they were talking about the B20 token coin they were going to bundle their purchases of people's nfts collection and put it in a virtual Museum where those who purchased the B20 token coin could access and view the artwork owning the B20 token was supposed to represent a type of fractional ownership in the virtual Museum and the contents inside of it here's the thing metakovan and his business partner conveniently owned 59 of the total supply of B20 tokens beeple was also given two percent of that Supply people and metakovan already had a working relationship before the big everydays 5000 sale when that sale happened and the media frenzy ensued the B20 token Rose in value to 23 as more people began obviously looking into who metokovan was people have accused that sale of essentially being a giant marketing stunt to increase the value of the B20 token even in their cools together you can hear people Express skepticism around the whole thing only for metakovan and the others to kind of bring him around other artists I can almost guarantee will not like this like they will not like you taking their work and like and likes and reselling those pieces I that I would be very surprised if other artists did not have a very strong dislike of that but what I find the most insane about this Saga was that the B20 virtual Museum that was supposed to flip the art World status quo was nothing impressive the B20 token has fallen over 99 in value since its all-time high despite all of this metakovan cells send headlines skyrocketing suddenly nfts were being craded out of internet memes or anything really that was culturally relevant to the internet from the outside all you had to know were that nfts were revolutionary and there was a lot of money involved you didn't even have to know that they were intrinsically tied to the world of cryptocurrencies or blockchain a successful repackaging once the sale of memes and other one-off nft sales cooled down it became more popular to start buying into nft projects these contained up to thousands of nfts inside of them usually following a certain theme or concept what are crypto chunks this these are the crypto Parts 25 by 25 pixels yeah they're icons of zombies and uh aliens zombies and yeah they all have different Mohawks and glasses and beard types and I mean what is Cool Cats the coolest nfts on the Block shoot I get a lazy lions and if they've been thinking about joining this amazing Community clone X this project is previously known as Akira's Nikki vampire it's got pudgy Penguins on The Chopping Block today they're selling us something called mini bits just as it had been with Bitcoin and token coins the name of the game was about hyping up a project that you can sell it for profit later nfts though were cooler than your average token coin so they had art behind them you could show them off by replacing your social media profile picture with an nft you purchase more so than ever hype and attention became an important part of growing the value of an nft which brings us to the Apes one of the most significant projects created after people's sale was the board ape Yacht Club otherwise shortened to just basey founded by the company Yuga Labs the project featured 10 000 different pictures of apes with this distinct board expression on their face the ball rape Yacht Club project had managed to arrive into the nft space at just the right time about a month after people was big sale there were a few popular people inside of the nft space already one of which went by the name of Jimmy McNeil's otherwise known as Jimmy eth on Twitter who shortly after finding out about the project announces their purchase of hundreds of board ape nfts then another popular figure in the nft space pranksy who had around 50 000 followers at the time tweets their own purchase of 250 board eights which later grows to 1 250. and all the
time these guys are tweeting about their purchases to their followers it starts to create this Buzz inside of the crypto space you've probably seen all over Twitter this crazy crazy thing with just after 12 hours of its official launch the Bassy collection sold out giving yoga Labs an estimated 2.8 million dollars in Revenue pranksy starts selling some of his Apes to NBA players who start tweeting and changing their profile pictures to those Apes in August the popular DJ Steve oh he tweets his own forty thousand dollar purchase of a board ape to his millions of followers hashtag eight follow ape began trending immediately famous digital artist people tweeting about it and creating an artwork about it which will continue to drive up the price of board Apes me a friend one of the shadiest parts about everything that followed were the Blurred Lines between celebrities and influencers clearly manipulating a market to pump up the value of their nfts and genuine posts simply just showing off their purchases you had Justin Bieber in January of this year posting a picture of a board 8 number 3001 to his 251 million followers a purchase that was reportedly worth 1.3 million dollars everyone sort of assumes that the Justin was the one that made the purchase himself right and he's just posting it on his Instagram but then Twitter users started to look into the records and they find that Justin's supposed crypto wallet had received 900 ether from another wallet address and that wallet address was associated with an individual named jean-pierro de Alessandro or as many others May recognize him Justin Bieber's business partner and Jan Piero owned his own nft collection called in-betweeners which Bieber had been promoting on social media already in those posts no disclaimer was made suggesting that Bieber had been paid to promote them I just got my first nft are you dead what was it I through moonpay in some of the announcements from celebrities about their nft purchases there was this constant reference to a company called moonpay thanking them for help with purchasing their nfts I got an ape too because I saw you on the show with people and you said you got a moon pay turns out moonpay was a company that was launched in 2019 which according to their website had One Singular aim to increase cryptocurrency adoption so that begs the question what is the relationship between moonpay and the supposed celebrities and influences there helping Buy nfts advice three times aboard a full moon they want you to not disclose that they had purchased isn't it a little shady that you have the CEO of moonpay a guy called Ivan Soto Wright who is an active participant in the nft market who is clearly well connected to the celebrities using his company service who has access to Insider information and likely knows when celebrities May purchase an nft before they do it and surprise surprise people started finding out that right on numerous occasions has purchased nft projects right before celebrities end up purchasing them prominent crypto skeptic and author David Gerrard had this post on his blog it was titled cryptographers try to scam artists again he wrote the nft grift works like this one tell artists there's a gusher of free money nfts are the future if you want buy into crypto to get the gusher of free money three they become crypto Advocates and make excuses for proof of work and so on 4. a few artists really are making life-changing money from this five you probably won't be one of them it's sold to you as this amazing thing where art is digitally verified on the blockchain and that pitch makes you think that on the blockchain when you purchase an nft there's literally an entry that shows your wallet and the actual image of the nft you purchased right there you want to know what is actually the case with most nfts there is no picture attached to the transaction instead it's usually a https or ipfs link containing the stored nft image so what you're purchasing with most nfts is just an entry in a database that contains a link to the image that anyone else can also access a little misleading to call that ownership but I guess at the end of the day that doesn't matter when just like icos nfts were just another speculative give Financial investment to throw your money into and to do that you had to buy into cryptocurrencies more money funneled into the machine in my experience of looking into crypto communities and its culture and various projects there is this game that is being played some are blatant about it and others less so but the game is this everyone is playing a role in promoting their project calling it revolutionary saying that this isn't like the others but ultimately everyone knows that at some point they're going to sell and perhaps it is because of the Grateful nature of the crypto ecosystem where everyone is incentivized to keep putting money into the system and to keep pushing it while simultaneously dismissing criticism on the surface everything is supposed to be positive and optimistic you have catchphrases and actions that are commonly used in cryptocurrency communities Hudl shortfall hold on for dear life which refers to holding on to your crypto assets no matter what hodling is seen as a good thing today we're going to be talking about the art of the whole wagami short for we're all going to make it which is used as both a greeting and an easy catchphrase to keep morale High we're all gonna make it and I say this with passion and confidence if you leave the market if you give up you will lose that is the ultimate failure we're still early is a sentiment often echoed in crypto communities an encouraging message for those who are both new and old in the space letting them know that they haven't missed out on the opportunity and further riches are on the horizon don't abandon hope is it too late to get into crypto no never it's never too late it's actually too early it's extremely early still those who hold on to their crypto assets even when there is really good reason to sell are called Diamond hands Diamond hands is actually a requirement keep Diamond handing okay a positive tree that is encouraged whereas those who do sell are labeled paper hands a negative trait which is actively discouraged the worst part about paper-handed Investors is that it influences other people to grow paper on their hands most crypto communities are encouraged to say good morning and goodnight to each other every day shortened to just a GM and GN kind of like a regular check-in and check out with members now negativity is usually handled in the same way since one group's negativity can actually devalue a project and affect everyone else's ability to make money if there's some bad news about a particular cryptocurrency project or cryptocurrencies in general it can be dismissed as thud abbreviation for fear uncertainty and doubt we have someone that again is trying to spread fun I just couldn't sit idly by him like find my investment and fought the leader of my investment or those who criticize are told you simply don't understand without any further elaboration or they're told to have fun staying poor which is a not so subtle nod to people's true intentions within the space or criticism is actually spun into a good thing for the project these are all very convenient actions to encourage when keeping someone engaged and hopeful in a crypto project is financially beneficial to everyone else [Music] I'm actually struck by how much the general public really hates it when someone gets into nfts and they just have an absolute adverse reaction I see this across Industries the nft Mania did something I think it it grew so big and so in your face from influencers and celebrities that it started making people mad I love being part of this community and being a voice and sharing my platform and just getting the word out there what community what what are you guys talking about you don't [ __ ] care about this I hate that they try to put on that they care about this Ford ape yacht club nfts which I think are ugly dumb cringe thank you guys for allowing me to stream about nft cartoons I hate this stuff it's getting worse so check this out I got a board Bunny and not only is a board bunny but it looks like me look at that nothing makes people hate you faster than nft Shilling if you're young and naive just like my brother and want to get into nfts you should check out boarding new board bunny nft project has now been classified as a scam welcome David doberger to the long list of influencers promoting scams further claiming the team has disappeared with six million dollars it's great to be a part of this project I love the designs inspired by Pokemon it's a Pokemon knockoff it's just like stealing money from people who are fans of Pokemon y'all better not miss this they promised Pokemon Partnerships uh all a lie and it ended up raking in 6.3 million dollars for the last six months I've been working on my own nft project so the project is called cryptozoom I believe it's going to change the game crypto Zoo Logan Paul's newest project are basically a bunch of stock photos from Adobe that have been poorly photoshopped unfungible tokens yes I do know what they are but I don't [Music] really nobody seems to like nfts we didn't find anybody who actually had anything positive to say about them whenever a big celebrity or influencer would post something related to nfts on their social media you'd see a whole slew of people responding with oh no not you too and this wasn't just limited to individuals either companies began getting a lot of flack for even talking about or dabbling into nfts in 2021 people found out what cryptocurrency actually was and they hated it is all get rich quick schemes promoted using technology as the cover all of it that's what crypto is and nft is the largest species I think in June there were 1500 computer scientists and technologists who wrote to Congress calling for more responsible regulation of crypto assets they said that catastrophes and externalities related to blockchain Technologies and crypto asset Investments are the inevitable outcomes of a technology that is not built for purpose and will remain forever unsuitable as a foundation for large-scale economic activity and so you start to wonder like okay like what's gonna happen and I know that it really shouldn't surprise me but a whole new packaging had been in the works and a brand new word was taking the stage our mission at moonpay on board the world to web 3. I have to admit it's a pretty convincing narrative the first iteration of the internet web 1.0 was essentially the first version of the web
mostly consisting of web pages and information there wasn't much you could actually interact with then came along Web 2.0 which brought access to many new features it focused on user generated content social media and more forms of participation this version of the internet became dominated by large corporations Web 2.0 is our current modern day version of the internet but now web 3.0 is coming it kind of just referred to a bunch of different things but the idea was that a new version of the internet is here where your online activity was going to be making use of blockchains and tokens to some degree or another so in theory the now centralized version of the internet owned by big Tech would become owned Now by its users in its initial bubble nfts were seen as just digital art right which is quite limiting at the end of the day nfts are just data on a public database that can act as a receipt of ownership over whatever that data contained you know whether it was a coin or it was a web link to a digital piece of art the idea was that if nfts could prove ownership over something then you could put anything on the blockchain real estate titles medical records University degrees legal records in the case of web 3 you'd have social media sites and video games all incorporating blockchain and nfts into their business model it didn't really matter what it was or how it would work exactly it just became this game of insert anything here but on the blockchain and just like that you've made it revolutionary you've just recreated the entire mortgage infrastructure that already existed it on the blockchain but that exactly the blockchain in real estate is going to be pretty mainstream five to ten years from now let's see solar grids electric grids self-driving car grids that will essentially be machine run and trolled and administered by blockchain best use case for blockchain is Healthcare what can and can't be turned into an nft ultimately what we're talking about is the tokenization of everything never mind if blockchains or tokenization actually fix the issues that it was claiming to solve in these industries it was literally the definition of a solution in search of a problem and then I'm lost as to like why the on the blockchain part matters besides basically what everyone means is they mean oh I want a public record of the transaction okay I mean people suggested that you could replace legal contracts with small contracts which are programs that are built on the blockchain and that's usually accompanied with the phrase coder's law this is a smart contract and this is a legal contract these two things aren't the same right you can't have law be enacted by computer code because law inherently requires third parties to assess evidence intentions and a bunch of other variables that you just can't Outsource that to computer code especially when that code is on the blockchain and it cannot be altered Nicholas Weaver a researcher and lecturer at UC Berkeley's department for computer science has this interview with current affairs and he brought up what he called Weaver's iron law of blockchain when somebody says you can solve x with blockchain they don't understand X and you can just ignore them so you start to wonder right who is behind all of this money that's coming and pouring into the crypto and web 3 space where is it coming from and why either I'm not seeing the Revolutionary potential that all of this has or this genuinely is a massive Mania and bubble that is being fueled by greed and delusion the so-called next version of the internet that's attracting big money from Adventure Capital Venture firm um called Andreessen Horowitz have you guys heard of it I kept seeing this venture capital name pop up we've been in the space for a long time kind of a big deal running the crypto fund with more than 7 billion in capital to deploy Andries and Horowitz otherwise known as a16z they're one of the largest Venture Capital firms they have a crypto fund with around 7.6 billion to be invested in crypto and web 3 startups and have been investing in crypto companies dating back to 2013. if you wanted to meet the smart money behind all of this then these guys were the best place to start they say that crypto is far more than just a financial Innovation it's social cultural technological in the month of October of 2021 a16z led a funding of 150 million dollars towards the company that was behind axi Infinity a16z General partner Ariana Simpson claimed that this was an example of where web3 is going to revolutionize the internet in her own words literally axi embodies a new generation of games what this means for the future of games and really the web as we know it is as big as your imagination will allow where do I begin actually Infinity was what you would call a play to earn game it was this new genre of games appearing in the web 3 space which as the name suggests allows players to make money when they play the game in the case of axi infinity what you had was this game where people would breed collect and fight with these creatures called axes when battling inside the game it was possible to earn this token called SLP which could actually be traded for real money so what started happening well people started playing the game but instead of focusing on the fun of the game the focus became on how to earn more SLP how do we profit from XC Infinity the most expensive accent I've ever sold was worth about eight hundred thousand dollars I've invested 13 232 dollars is even play axi Infinity you had to purchase three axi nfts right and as the value of axi nfts start to rise certain players wouldn't be able to afford the buy-in price so guess what started happening those who had the money to buy three axes began to lend their creatures out to players who couldn't afford it and they were called Scholars how to set up your own scholarship program as a manager in axi Infinity I'll be giving out a scholarship every two weeks so that's another six scholarships is my goal Scholars would then play the game using their rented axes earn SLP and then give a cut of their earnings to their managers my team of 12 Scholars was roughly earning me 1 700 a month 600 from my Scholars with all my current scholarships working I'm earning about six thousand dollars a month axi Infinity a play to earn crypto gaming Juggernaut that has led people in countries like Philippines and Venezuela to make a living these are players from the Philippines who are making a living playing accents most of the scholars who couldn't afford the buy-in price they were from developing countries right people who likely saw actually Infinity not as a game of leisure but as a means of producing income I am here to apply scholarships Infinity I want this scholarship because I want to earn more I can play 6 to 12 hours a day just for playing after infinity I will treat this as a job not just only a game I want to help my family under expenses and save up money for my tuition on college so I want to be a scholar so that I can meet the needs of my family what you ended up with was a game where players are playing in order to make money people are basically feeding their entire villagers playing our games but the only reason that they're making money is because others are buying into also make money in the case of things like actually Infinity there actually are a bunch of innocent victims right I mean when you run a pyramid scheme unfortunately you get a bunch of poor people in the Philippines who are poor when they start and they're just hoping to make some money but then what happens is they actually lose money the value of SLP which is the token that people use to actually make money in the game has fallen 99 since its peak and its user base has been in Decline since Times magazine came out with this article and it was interviewing this guy called samerson orias a line cook from the Philippines who was facing Financial stress after his mother had a stroke and electricity and grocery bills were stacking up Arias jumped into the axi Infinity game and then exited 14 months later he described it as boring and stressful Arias along with other players of the game told Times magazine that acts see Infinity reinforce predatory systems and gave them false hope it's already dystopian as hell but people in the developing world that's not just dark that [ __ ] again I find myself coming back to the same question what is it that VC firms are seeing the potential in in this crypto space why do they keep pouring money into it the overwhelming majority of tokens are our Securities yeah but they're being dumped onto retail investors this is being done explicitly by Venture firms I won't mention any names who are buying into companies early getting into tokens and then those tokens are being listed on exchanges the public is buying into them in order to get a financial gain they have no interest in using those tokens for any utility VC firms have a commonly used strategy they invest in a bunch of startups most of those startups will fail a few will succeed and with the ones that succeed a VC needs to decide on an exit strategy an event that allows them to liquidate their position in a company and essentially make money this is a process that can take years so there's a another idea that is proposed by Skeptics that the world of crypto offers an incentive for VC firms to invest in a crypto company receive a percentage of their tokens and then sell those tokens to retail Traders when it becomes publicly available all achievable within months highly profitable and fairly unregulated with crypto tokens they can cash out in a few months and the way that this actually works is they encourage their fundees to basically issue unregistered Securities Anderson Horowitz invested in a bunch of startups that all issued tokens that all got dumped on retail including Anderson Horowitz dumping a lot of them on retail this is blatant Securities fraud but they didn't commit the Securities fraud it was just the companies they invested in on the surface web3 has this narrative which is all about taking money out of the hands of the rich and the big Tech and giving it back to the users but a16z is the exact same company that has funded some of the biggest web 2 companies like Facebook and Twitter I'm sure that there are many inside of these firms that you know really believe in the potential of web 3 or crypto or blockchains or whatever buzzword you want to use but it becomes increasingly harder to see that as anything thing other than hyper optimism or another word for it delusion there's this interview with Mark Andreessen right who's the co-founder of Andreessen Horowitz and he's on this podcast episode with an economist and blogger called Tyler Cohen and he proposes the idea for podcasts to make use of web3 a well-known podcast host how does that person get paid in a better way through web 3.0 make that more concrete for us now Mark Andreessen is someone that by all accounts should
have a good answer to this question but instead yeah I mean I mean they can pick their business model I mean they can pick their business model they can decide you as a super based business model you know micro transactions they can pick you know they can pick whatever model they want um you know they can also have indirect you know there's this old this whole new rise of this kind of the the non-fungible token you know when pressed to give an actual use case what you get is an answer with all the right buzzwords and phrases but little actual substance I compare it to the internet like in all seriousness I compare it to the internet which is the internet basically 93 or so yeah it's like 93 94. this is the only the only time I've ever said this is like the internet is is this a16z uses the same narrative that a lot of crypto enthusiasts will also use you may hate it you may think it's a fad but crypto and web 3.0 are just like the internet even I made this comparison when I looked at the entire space in a more favorable light now though I just think it's another form of smoke and mirrors it is the biggest technology shift since the internet the blockchain the consumer blockchain's the biggest new thing since the internet itself Bitcoin began in 2009 arguably blockchain technology and the foundations for it began even earlier than that it's been 13 years since this story began with Bitcoin 13 years to find a solid use case or at least one that justifies the hype and is already better than an existing system crypto and web 3 is really great at one bang which is trading and speculation and there is absolutely no democratization of anything the centralization of exchanges centralization of miners centralization of crypto wild is the most concentrated amount of centralized wealth in the history of humanity worse than disease it's all [ __ ] 13 years after 1983 which is considered to be the birth of the internet we were already seeing very clear-cut use cases even in those early days people could weather reports they could check the news they could send emails and many other uses that we still use to this day I sent a message to my doctor asking for a repeat prescription and he said he's left the prescription for me in the chemist by even making the comparison to one of the biggest Revolutions in information and communication is already assuming that cryptocurrencies are revolutionary and they're bound to find mass adoption at some point when that is the very future we're putting into question [Music] one recent post that I remember on the Bitcoin subreddit was titled does anyone else feel like Bitcoin is their literal last ditch effort to become wealthy in their lifetime I don't imagine that this is the only person in the crypto space that is thinking that way the crypto machine has continued running new packaging of ideas more money funneled into the system and a constant search to find a use case that justifies the hype and the claims of revolutionary technology if the critics are right then what we're looking at is a ticking Time Bomb if the critics are right then this is a scheme that will leave tons of regular individuals left holding their bags wondering how this managed to happen it already has a scheme that managed to infiltrate the realm of media and entertainment that managed to make use of social media's ability to spread this fear of missing out they capitalized on Greed and a get rich quick mentality if the critics are right then I suppose there's only one question that remains at what point does the ticking Time Bomb go off [Music]